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Diaper Companies Suffer as Millennials Wait to Have Kids

What can this industry do to stay afloat? Jason Dorsey weighs in.

Millennials’ decision to have kids later in life is sending shockwaves through the diaper industry.

According to a recent CNBC article, the U.S. birth rate dropped to a historic low in the summer of 2017 as would-be parents pushed back parenthood. Additionally, the $12.6 billion diaper business dropped 0.3% from 2012 to 2017.

Why Aren’t Millennials Buying Diapers?

This correlation is not a coincidence. Though Millennials are now in traditional child-rearing years, many of them are not ready to have children because they are still reeling from the great recession, finally at a stable point in their careers, or drowning in student debt. Whatever the reason, it’s clear that Millennials have a lot of other things demanding their attention.

“This could be parents delaying or that drop could be here to stay,” said Jason Dorsey, president of the Center for Generational Kinetics. “We won’t know for another five years, but companies can’t wait that long to find out.”

Across the board, diaper companies are feeling the hit. Kimberly-Clark, the maker of Huggies diapers, recently announced a global cut of about 13% of its workforce. Pampers-maker Procter & Gamble also reported a 1% drop in its baby, feminine, and family care business.

And it’s not just diaper companies: Edgewell Personal Care, the maker of Playtex baby bottles, has seen sales of its infant feeding products decline. Johnson & Johnson has seen a drop in the sales of their baby oil, bubble bath, and nursing pads as well.

How Can Diaper Companies Thrive in a Millennial Market?

So what can these big companies do to not only stay afloat but to thrive in a Millennial market?

“Big brands right now need to adapt, because a delay in having children or a decline poses a significant material threat to their core business,” Dorsey said. Specialized companies are going to have to extend their product lines, making different products for babies or focusing on toddlers rather than newborns.

Diaper companies might also want to think older. According to IBISWorld, as the number of adults older than 65 grow, roughly 31% of all diapers sold in the U.S. were adult diapers.

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